NZ introducing laws to keep Hobbit

The New Zealand government will introduce urgent legislation today to change labour laws as part of a deal to keep production of The Hobbit films in the country.

The deal to stop Warner Brothers filming offshore was struck after two days of talks between studio executives and senior government ministers, including prime minister John Key.

Mr Key says Warner Brothers will receive an extra $15 million in tax rebates and $10 million in marketing offsets.

He says labour laws will also be clarified to ensure that film industry workers hired as contractors cannot later argue in court that they are employees.

"An agreement has been reached between the New Zealand government and Warner Bros that will enable the two Hobbit movies, to be directed by Sir Peter Jackson, to be made in New Zealand," he told a news conference.

Warner Brothers had threatened to take the $US500 million production elsewhere after a dispute with actors unions.

Mr Key says the deal will safeguard thousands of jobs for New Zealanders and will help to promote the country as a tourist destination.